How To Collect And Secure Payments Owed To Your Business
Full Video Transcript
Almost every business relies on credit to some degree. You may provide services and send an invoice to a customer, for example. Many customers will pay you, but some may not, and it's important to protect your business by securing unpaid accounts. (In order to create a security interest in an unpaid account, the Uniform Commercial Code, or UCC, requires you to extend credit, receive a security agreement signed by the by the buyer of your goods or services, and file a financing statement. Your security interest will be given the priority it deserves in the collateral if both you and the buyer sign the financing statement and file it with the appropriate government agency. If your goods and services are used to build or improve real property, then you may be entitled to file and material men's, or professional's, lean on the property. As with other types of liens, you need to file a financial statement to secure your order of priority in the property. If your financing statements are complete and filed with the state, then and your security interest will be fulfilled according to the first in time, first in right theory. Meaning, those who file first are the first ones paid when a buyer defaults on payment.